Preliminary data show that outstanding loans of commercial banks, net of reverse repurchase (RRP) placements with the BSP, grew at a slower rate of 15.6 percent in December from 16.8 percent in November. Likewise, the growth in bank lending inclusive of RRPs decelerated to 14.7 percent in December from 15.4 percent in the previous month. On a month-on-month seasonally-adjusted basis, commercial bank loans net of RRPs and inclusive of RRPs increased by 0.3 percent and 0.5 percent, respectively.

Loans for production activities�which comprised 88.8 percent of banks' aggregate loan portfolio, net of RRP � increased at a slower pace of 15.8 percent from 17.2 percent in the previous month. The growth in production loans was driven primarily by increased lending to the following sectors: financial and insurance activities (30.6 percent); wholesale and retail trade, repair of motor vehicles and motorcycles (15.2 percent); real estate activities (11.1 percent); manufacturing (13.1 percent); electricity, gas, steam and airconditioning supply (12.0 percent); and, construction (35.9 percent). Bank lending to other sectors also increased during the month.

Meanwhile, the growth of loans for household consumption was marginally lower in December at 13.5 percent relative to the 13.8-percent growth in the previous month. The deceleration in motor vehicle loans as well as the contraction in salary-based general purpose consumption loans and other types of household loans was tempered by the faster expansion in credit card loans during the month.

The BSP will continue to ensure that the expansion in domestic credit and liquidity proceeds in line with overall economic growth while remaining consistent with the BSP's price and financial stability objectives.

Source: Bangko Sentral ng Pilipinas (BSP)